New Bankruptcy Laws are not working out

[coolbreaker]

http://www.moneysavingfreetips.com/n...uptcy-law.html you can read the full article here

"A study done on tens of thousands of consumers who are trying to seek bankruptcy protection after the new bankruptcy law was put into place in October 2005, found that the new law is not working out as intended.

The study carried out by National Association of Consumer Bankruptcy Attorneys (NACBA) found that of the 61,355 consumers who were asked to seek help from credit counseling firms in paying back their debts, 97% of them were not able to pay even little amounts. Under the new bankruptcy law, credit counseling is one of the first required steps that consumers must undergo, in order to proceed with their bankruptcy filings.

The study also found that almost 4 out of 5 consumers were not declaring bankruptcy to dodge and do away their debts. Unavoidable circumstances such as death of a spouse, loss of job or huge medical bills and expenses were some of the reasons."

[FilingOnMyOwn]

shocker

[NASCAR20FAN]

That is true... I don't want to "dodge" my debt!My problem is I have a judgment against me, and now I owe back taxes for '05. I'm in no posiition to pay off the judgment and the taxes I would surely end up being evicted from my place ans have no where to go.

[HopeinHorizon]

Doesn't surprise me...

There was nothing in the law that would help the average american employed, nothing in the new law to keep marriages together, nothing in the law to decrease medical expenditure when a crisis arises...

When they take care of some of those issues, THAT is when bankruptcy rates will fall... It doesn't seem that hard of a concept, instead of spending millions on this new law, they should have dumped the money into programs that the average american could benefit from to keep us out of this mess!

[NASCAR20FAN]

Very true... People who f'd up and are now trying to do the right thing are the one who really take it up the bum on this. If I would have hit the lottery or something we wouldn't be having this conversation right now.

[aa06a47]

Doesn't surprise me...

There was nothing in the law that would help the average american employed, nothing in the new law to keep marriages together, nothing in the law to decrease medical expenditure when a crisis arises...

When they take care of some of those issues, THAT is when bankruptcy rates will fall... It doesn't seem that hard of a concept, instead of spending millions on this new law, they should have dumped the money into programs that the average american could benefit from to keep us out of this mess!

AMEN HopeinHorizon. Don't forget, they also did nothing to address the crack pushing credit card industry in putting any financial reponsibility back to them. Ungodly credit limits, being able to change the rate and terms after the "loan". The "reform" was simply to shoot at all the ants with a laser cannon instead of just going after the one or two bad ants in the colony.

[FoolAndHisMoney]

There's also this blog stating the same thing:

http://blog.startfreshtoday.com/archives/cat-bankruptcy-news.html

This answers a lot of our questions regarding what's reasonable after you pass the means test.

[bkadv]

This new law could back lash on consumers for years to come also.
With the ungodly prices of fuel and heating costs for the home, then coupled with credit card minimum payments nearly doubling, the consumer who may be just ok right now will find themselves in trouble some time down the road.
The process for filing is now longer and tougher standards for most. Although it may not hinder their abililty to file bk, it will take them longer to complete the process and cost them more $$ they already don't have.

[Minnymouth]

Rising prices of EVERYTHING - gas, food, insurance, taxes, interest rates, etc in the future will force many to file bankruptcy WHO NEVER DREAMED they would have too......

Even those that are considered "well off" are going to feel the pinch!!!

And those from paycheck to paycheck or just comfortable will feel it bad...

[debtisbad]

We actually have not yet seen the fall out from higher fuel. Cnn keeps talking about fuel going up, and I believe it will. I fully expect to see fuel at somewhere between 3.50-4.75 in the next year. I seriously doubt the oil co's would price at 5.00. That is where I think consumers would start to revolt, and they are well aware of that. The real fall out will come with home heating costs. My living in an rv idea is looking better and better . I do not believe that the American middle class can sustain the coming pricing. Maybe I am incorrect, but I just do not see how.

[Minnymouth]

With the climbing interest rates on cc if late on payments - people who used to charge airfare, gas, etc will not be so quick to do it for vacations this year.... they'll stay home.....

Right now a plane ticket is rediclious (can't spell) especially with all the "hidden fees" we don't see added too them.....

Anything that is delivered from one place to another will create a price increase.....

Middleclass America is just that "middle class" - they are comfortable but still have limitations in their budgets..... When the rising costs cut into their "spending money" - they too are strapped for funds!!

Between job losses (and they can say all they want about the hiring/new jobs) - large companies moving overseas, rising prices (everything) SOON there will be no "middleclass America".......

It's coming and its not far away.............

[aa06a47]

I believe it is estimated that 70% of people live paycheck to paycheck. Getting back and forth to work will push those 70% over the edge, perhaps not bankrutpcy, but that new designer shirt they want, that bottle of wine they like, that vacation they were going to take this summer....gone. People will begin either only buying what is necessary or keep charging them cards up until they are forced to file bk.

I am afraid we are on the road to a very deep recession.

[bkadv]

All these thoughts are so true. The sad thing is that most people don't or won't accept that it may happen to them. We've all already been there, done that and been ran through the wringer. The result being we are now much wiser and tighter with our dollars! Many, many are still running up the credit cards and spending on things they don't need. Meantime prices of everything is rising and rising, trapping these people in the cycle of debt that almost always leads to bk. The road will be much tougher for these people. as laws get more strict.

[anonymuse]

I think I'll be buying a lot more Top Ramen and Mac'n'Cheese if the price of gas goes any higher.

[debtisbad]

I think we are soon to see a shift in attitudes in America concerning housing. For many years, many Americans have aspired to own a "McMansion". That, of course, is what all of the builders have been building. It is not uncommon to see neighborhood after neighborhood full of 3,000+ square foot homes. Now, I ask you if oil is to go higher and gas goes to 4/gallon, how will people heat those homes. Could there be alot of "for sale" signs on the horizon. Thoughts??